Who said supply chains can’t save the world?

INDUSTRY VIEW

16 July 2018

By 2050, the world will need to feed 60 per cent more people than it does today[1]. Yet currently one third of all food produced globally is lost or wasted. In Europe alone, two thirds of this wastage happens before the food even reaches the consumer[2].

So who – or what – is to blame? The UN Food & Agriculture Organisation has pointed to “a lack of coordination between actors in the supply chain” as a large contributing factor[3].

If you work in the manufacturing, retail or supply chain sectors, you’ll recognise that we have an unmissable opportunity to make a profound difference to the environment while also being able to serve more of the world’s population. It will take revolutionary ways of thinking, acting and working to build supply chains able to cope with both the challenges of today and the needs of the future. Together we can reduce wastage, inefficiencies, costs and carbon emissions and help protect the environment.

It won’t be easy

Market conditions for manufacturers and retailers are as tough as ever. Input costs such as raw materials, fuel, and transportation are on a steep upward curve, and competition and regulations are increasing.

Meanwhile, consumer behaviour is becoming less predictable. We have to figure out how to seamlessly serve customers across both traditional and online retail channels. With more complexity and less ability to anticipate consumer demand, supply chains are faced with either losing the sale – and potentially the customer – or incurring excessive waste, fulfilment costs, inventory holding, and ecological damage.

The way the world makes, moves and sells goods needs to change, and fast.

Look beyond your own supply chain

We need to start looking at the global supply chain as an interconnected ecosystem and stop thinking about optimising only our part of the supply chain – which inevitably means a focus on reducing costs. This only creates a damaging domino effect, as cost-cutting efforts cascade down the chain in a race to the bottom.

In the battle to save dollars, we’re missing possible opportunities for true savings and innovation. If we want to thrive in this quickly changing landscape, no supply chain can afford to stand alone. Collaboration, innovation, agility and sustainable development are all critical.

Tearing up the rulebook

This won’t be easy. It will mean overcoming siloed approaches that have been embedded for generations and looking for partnerships that cross normal boundaries.

CHEP is acting as an agent of change across the industry. We’re working with customers, suppliers and governments to help create smarter and more sustainable supply chains.

CHEP has greater involvement in the world’s supply chains than anyone else, and we’re not in competition with manufacturers or retailers, so we’re able to use our knowledge and expertise to find better ways of transporting a greater number of goods with less waste, less cost and less complexity.

We’re already using our network knowledge to bring greater visibility to demand patterns and product flows. For example, in Spain we produce a quarterly CHEP Retail Index which predicts consumption trends and growth in the retail trade. Our customers are building these insights into their forward-planning, making production and transport schedules more efficient and co-ordinated. And this means less waste and less cost.

We’re also helping a global consumer goods manufacturer look at the environmental and financial costs of different packaging options across its extended supply chain. This work has already identified end-to-end savings of up to 40 per cent, while at the same time reducing CO2 by up to 60 per cent, water use by up to 70 per cent and solid waste by up to 90 per cent[4].

Collaboration really works

CHEP’s Transport Collaboration Solutions are bringing customers together, helping them find synergies in their delivery routes and save significantly on transportation costs and associated CO2 emissions. So far we have 217 collaborating customers, reducing empty truck journeys by 4.5 million kilometres, CO2 emissions by 4,475 tonnes and generating shared savings for all parties[5].

The more we’re able to find revolutionary ways of working together, the more we’ll be able to bridge the growing gap between the capabilities of our existing supply chain and the increasingly complex demands of our customers – and our planet.

The only way to achieve sustainable development is to start thinking sustainably.